Search Category: Sales Tax
Collecting Sales Tax in Idaho
Retailers must collect tax correctly on all Idaho sales. It’s important for retailers to understand:
- What is a taxable sale?
- How does a taxable sale become exempt?
- Which sales aren’t taxable?
Taxable sales
Retail sales of the following goods and services are taxable in Idaho:
Tangible personal property
Anything you can feel, see, touch, weigh, or measure, other than real property
Admission charges
Examples
- Tickets to a movie
- Cover charges at a club
- The price to see an entertainer
Fees charged for use of a facility or for use of tangible personal property for recreation
Examples
- Membership fees to health clubs
- Renting a park for a picnic
- Greens fees at golf clubs
- Participation in a recreational sports league
Providing hotel, motel, lodging, or campground accommodations
Examples
- Renting a room for 30 days or less, including personal homes as well as commercial hotels
- Renting a banquet room at a hotel
- Renting a campsite
Custom-made tangible personal property
Examples
- Materials and labor for a custom-built desk
- Materials and labor for a made-to-order suit or dress
- Materials and labor for a commissioned piece of art
Labor to produce, process, or fabricate tangible personal property
Examples
- The labor fee to make a table from a customer’s lumber
- The fee to cut or form a customer’s metal
- The fee to embroider a logo on customer-owned clothing
- The labor fee to assemble a bicycle, either by the seller or a third party
Any publication, or labor to print or imprint
Examples
- A subscription to a newspaper or magazine
- A newspaper bought at a grocery store
- The fee to have business cards printed
- The fee to engrave a customer’s trophy
Food, meals, and drinks and the labor to prepare or serve them
Examples
- A hamburger and soda at a drive-in
- A cocktail at a lounge
- The price to cater food for a party
- Personal chef service
Renting or leasing tangible personal property
Examples
- Renting a boat
- Leasing a car
- Renting bowling shoes at a bowling center
- Leasing a copy machine
- Renting clothing
Exempt sales
Some goods and services can be exempt from tax if the buyer gives the seller a completed resale/exemption certificate. These sales usually fall into one of the following categories:
The buyer is exempt from all sales tax
Examples
- Idaho Foodbank Warehouse, Inc.
- State and federal credit unions
The buyer’s industry is exempt from all sales tax
Examples
- Nonprofit hospital
- Nonprofit canal company incorporated solely for farm irrigation
The buyer will use the goods in an exempt activity
Examples
- Manufacturing company that will use the goods more than 50% of the time to produce tangible personal property for sale to others. The goods must be directly used in and necessary to the production process.
- Church that buys food for its food bank
The buyer will resell the goods or services
Examples
- Registered Idaho retailer
- Wholesaler that doesn’t make retail sales
Accepting a resale/exemption certificate from your customer:
- Your customer must give you a completed form
ST-101, Sales Tax Resale or Exemption Certificate
- The exemption certificate must have all applicable questions answered, and be signed and dated
- Keep the certificate and don’t charge tax on future qualifying sales to the customer
Note: A few items are exempt for all taxpayers (no exemption certificate is required):
Examples
- Bullion
- Membership fees in a nonprofit hunting or shooting sports organization
- Official documents (e.g., deeds, licenses)
- Electricity, water, and natural gas delivered to a consumer through pipes or mains
Nontaxable sales
Sales of the following goods and services aren’t taxable in Idaho:
Real property sales, rentals, or leases
Examples
- Office space
- Living space
But motel or hotel rooms rented for 30 days or less are taxable - Lockers, such as those used at amusement parks, gyms, and airports
- Boat docks
- Billboards
- Parking spaces
But campground or trailer park accommodations of 30 days or less are taxable - Storage space
- Booth space at fairs
But renting personal property for use in the booth is taxable - Facilities rented for recreation if:
- There’s a charge for admission to the facility, and
- Tax is collected on the admission charge
Telephone tolls and utility charges
Transit fees
Examples
- Taxicab fares
- Bus tolls
- Airplane tickets on chartered or regularly scheduled flights
Software that isn’t tangible personal property
Examples
- Custom computer software
- Software delivered electronically
- Software loaded by the seller and left on the buyer’s device
No discs, drives, etc. left with buyer - Some remotely accessed computer software
Sales Price – Retailers
“Sales price” and “purchase price” mean the same thing. They mean the price a buyer pays. Tax is due on the sales price or purchase price no matter how the buyer pays the seller:
- Cash, check, credit card, PayPal, electronic payment methods
- Financing agreement – including I.O.U., or other promise to pay
- Barter – paying with goods the buyer owns
What the sales price includes
Charge tax on the following even if you list them separately on the invoice:
- Inbound transportation – fees charged for shipping the goods to the retailer
- Manufacturer’s or importer’s excise tax – U.S. federal taxes that are charged to the retailer before the retail sale, but may still be a separate item on the bill to the buyer
- Examples: Taxes on cars, beer, wine, and cigarettes
- Services performed by the seller as part of the sale
- Examples: Fee to assemble an item; clothing alteration charge
- Surcharge for paying with a credit card or gift card
- Prompt payment discounts encouraging the buyer to pay the bill on time, such as a 2% discount if a bill is paid within a certain number of days. Charge tax on the amount before the discount is given.
- Manufacturer’s coupon or rebate deduction amounts are included in the amount tax is calculated on if the manufacturer reimburses the retailer or the buyer for the discount given to the customer.
Sales price for cereal | $4.50 |
Manufacturer’s coupon – doesn’t reduce sales price | .50 |
Charge tax on | $4.50 |
Sales price for computer | $800 |
Manufacturer’s rebate* – doesn’t reduce sales price | 50 |
Charge tax on | $800 |
* Both mail-in and instant manufacturer’s rebates are part of sales price.
Special rules apply to rebates for motor vehicles.
What the sales price doesn’t include
Don’t charge tax on the following if you list them separately on the invoice:
Trade-in allowances
This is the value of goods traded in on other goods, whether in part payment, full payment, or more than full payment. The item accepted in trade must become part of the seller’s inventory.
Sales price for stove | $800 |
Trade-in allowance – reduces sales price | (250) |
Delivery to the buyer – not taxed if separately stated | 25 |
Charge tax on | $550 |
Trade discounts offered by a retailer
This discount can be a retailer’s coupon, a marked-down price, or a customer discount offered to a good customer.
Sales price for lumber | $2,000 |
Good customer discount – reduces sales price | (300) |
Retailer coupon – reduces sales price | (50) |
Early payment discount – doesn't reduce sales price | 34 |
Charge tax on | $1,650 |
The retailer can’t receive money or reimbursement from a third party for a discount on the purchased item. A prompt payment discount offered by a manufacturer can’t reduce the taxable sale price.
Interest, carrying charges, service charges, or financing charges on goods sold
Sales price for ring | $1,000 |
Interest – not taxed if separately stated | 90 |
Late fee – not taxed if separately stated | 5 |
Charge tax on | $1,000 |
Special rules apply to interest, service, and financing charges on leases — see our guide, Renting and Leasing Tangible Personal Property.
Other examples of what the sales price doesn’t include:
- U.S. federal excise taxes that are charged to the customer at the time of the retail sale. The retailer pays the supplier the tax when buying the items for resale, then charges and separately states the excise tax on the invoice
Example: New large tractor-trailer units - Shipping and handling charges for shipping the goods directly to the consumer. You must separately state the charges.
- Installation labor, such as the labor to install a television in a home. You must separately state the labor.
- Repair labor to repair a customer’s goods isn’t taxable when separately stated, but the parts sold to make the repair are taxable.
- Insurance charges on goods rented or sold – when separately stated
Separately state sales tax on the invoice
You must separately list the amount of tax on the sales invoice. Customers must know how much tax was charged and be able to show they paid tax.
You can’t offer to pay the tax yourself or advertise that you won’t charge tax.
How to calculate the tax
Calculate the sales tax by either:
- Using the sales tax “bracket card” that we mail to you with your permit, or
- Multiplying the total taxable sales amount by the tax rate in effect.
Tax is calculated on the total of taxable items in a sale. For example, if you sell three taxable items totaling $10.50 together, tax is calculated on the total, rather than the individual prices of the three items in the sale.
Buying Exempt for Resale
Goods retailers buy for resale might qualify for an exemption. Goods retailers buy that aren’t for resale are generally taxable.
Resale or exemption certificates
ST-101
If you buy goods for resale from a seller doing business in Idaho, you must give the seller a completed Form ST-101 – Sales Tax Resale or Exemption Certificate. The seller should keep this form on file and not charge tax on your future qualifying purchases.
To complete the form:
- Write the name and address of both the seller and your business at the top of the form.
- In section 1 “Buying for Resale,” line a — write the nature of your business and describe the products you sell.
- On line b — check the first box and write your Idaho seller’s permit number.
- Under “Buyer” at the bottom of the page — sign the form. Fill in the rest of the fields (name, title, EIN or driver’s license information, and date).
Out-of-state businesses
If you buy goods for resale from out-of-state businesses that are registered Idaho retailers, you can complete the Uniform Sales and Use Tax Certificate – Multijurisdiction instead of form ST-101.
To complete the form:
- Write the name and address of both the seller and your business at the top of the form.
- Check the box for “Retailer.”
- Write your Idaho seller’s permit number in the ID section.
- Sign and fill out the bottom of the form.
Items retailers pay tax on
You have to pay tax on items you buy that aren’t for resale to your customers.
- Merchandise display racks
- Cash registers
- Cash register tape and sales invoices
- Flyers handed out to customers
- Advertising inserts and mailers
- Price stickers (unless product information is on them, such as stickers used in the meat department of a grocery store)
- Office equipment and supplies
- Warehouse shelving, equipment, and supplies
- Incidental materials you use to repair a customer’s product when the value is minimal and you don’t itemize it, such as lube grease, screws, or nails, etc. Read our Repair Shops page.
- Goods you take from your resale inventory to use yourself or give away — unless an exemption applies.
Examples of exemptions that apply:- Employee meals at a restaurant
- Food or beverage tasting
Mining Activities that Qualify for the Production Exemption
Businesses that qualify for the exemption
To be eligible for this exemption, your business must:
- Engage in a qualifying mining activity. This includes:
- Developing a mine that has known deposits
- Operating a mine — underground; aboveground, open pit (including gravel pits when the gravel will be sold at retail)
- Drilling holes to help move the ore
- Blasting
- Breaking ore for easier removal from the mine
- Removing ore from the mine
- Backfilling mined-out areas
- Further processing ore for sale
- Be primarily devoted to mining. One way many businesses satisfy this requirement is that they devote the majority of their business operations to qualifying mining activities. Example: Spending more than 50% of the business’ working time and activities mining ore.
- Own the ore you mine and process.
- Sell the ore you mine and process. Either your business or someone else must sell the ore at retail.
- Report your business’ profit or loss on an income tax return.
Note: Exploring for ore isn’t a qualifying activity.
OR
Be a custom miner. Your business performs a qualifying mining activity for a miner and receives money or other compensation for the work.
Examples:
- Drilling
- Blasting
- Breaking ore
- Removing ore from the mine
- Backfilling mined-out areas
- Further processing ore for sale
Custom mining doesn’t include:
- Services performed on real property
- Clearing land
- Transporting ore
- Exploring for ore
A custom miner doesn’t have to own the ore that’s mined or processed as long as the owner of the ore sells it.
Separately operated business segment
A separately operated business segment can also qualify. It can be a division, branch, or even a cost center. You must keep separate accounting records for the business segment to qualify as a separately operated business segment. This includes recording income, expenses, wages, and assets of the business segment separately. You must also have employees dedicated to operating the separate business segment.
Businesses that don’t qualify for the exemption
This exemption is only for businesses that devote the majority of their business operations to qualifying mining activities trying to make a profit. Operations that aren’t eligible for the exemption include:
- Mining as a hobby
- Mining ore for personal use
- Mining ore for use by your business
Purchases that Qualify for the Mining Exemption
Purchase Requirements
An item qualifies for the exemption, if it meets all of the following requirements:
- Primarily used in the mining process. (See Idaho Code section 63-3607A.)
- Necessary or essential – you can’t remove or process ore without it.
- Directly used in or consumed during mining or ore processing – after the beginning and before the end of the process:
- The mining process begins when you start to develop a known ore deposit
- The process ends when the ore is at the later point of
– When you place it in storage, even temporarily, to be prepared for shipment or
– When the ore’s ready to be sold in its final form
- Tangible personal property – must not become real property
- Allowable by law – must not be specifically excluded from the mining production exemption by law or rule
Exempt Purchases — Mining
The production exemption lists items that are exempt from tax. Qualifying miners can also buy the following items exempt:
Note: There are separate sections for underground mining and for above-ground and open pit mining.
Underground mining
Equipment and supplies used to develop a mine with known ore deposits
- Diamond drills and attachments
- Levels, laterals, crosscuts, drifts, stopes, raises, and shafts
Note: Equipment, supplies, and materials used in exploration activities aren’t exempt.
Mine support materials
Timbers, rock bolts, concrete, matting
Slushing and mucking equipment
Used to convey broken ore and waste to passes and chutes
- Slushers, muckers, scrapers
- Loaders, hoists
- Backhoes used to recover ore and waste
Equipment used for drilling blast holes
- Pneumatic rock drills
- Air compressors that supply compressed air to operate pneumatic drills
Extraction and retrieval equipment
Used to extract the minerals and ore from the mine
- Blasting supplies: explosives, caps, fuses
- Loaders, backhoes, and similar earthmoving equipment
Equipment used to move ore, waste, and people from the mine to the surface
- Haulage equipment
- Locomotives, cars, batteries
- Tracks and supplies
- Ore dumps and bins
- Electrical distribution systems, including light signals
- Vertical and horizontal support and transport
- Skips, hoists, hoist cables
- Shafts, shaft timbers, shaft pockets, shaft guides
- Concrete
Backfilling equipment used to backfill mined-out areas
- Pumps, including sumps
- Pipes
- Concrete
- Supplies
Quality control equipment and supplies
- Assaying
- Sampling
Safety equipment and supplies
If required by a state or federal agency and if used in the production area
- Hard hats
- Miners’ lights
- Belts
- Batteries
Pollution control equipment, supplies, and materials
If they:
- Are required* to meet air and water quality standards
- Become part of the pollution control equipment, or
- Are used to operate the pollution control equipment, or
- Are used to treat the effluent from the mining process.
* The standards must be set by a state or federal agency that has authority to set them.
Note: Pollution control materials or equipment that become part of real property may also be exempt for mining companies that qualify for the production exemption. (See Idaho Code section 63-3622X.)
Examples of pollution control equipment that aren’t exempt:
- A building or other structure that merely houses the equipment
- Construction equipment used to build or install pollution control equipment
Aboveground, open pit mining
Blasting and drilling equipment
Used to loosen or remove ore and overburden
- Track drills, rotary drills
- Drill rods, drill bits
- Compressors to operate drills
Extraction and removal equipment
Used to remove loosened ore and overburden from the pit
- Loaders
- Excavators
- Backhoes
- Power shovels
Haulage equipment
Used to move ore and overburden to stockpiles, loading sites, or disposal sites at the mine
- Heavy equipment
- Transport equipment
- Scrapers, carryalls
- Off-highway trucks and trailers
- Conveyors
Equipment used for sorting, grading, sizing, and crushing ore and overburden
- Bulldozers
- Loaders
- Crushers
- Conveyors
- Grading
- Sorting
- Sizing
- Crushing
Pollution control equipment, supplies, and materials
If they:
- Are required* to meet air and water quality standards
- Become part of the pollution control equipment, or
- Are used to operate the pollution control equipment, or
- Are used to treat the effluent from the mining process.
* The standards must be set by a state or federal agency that has authority to set them.
Note: Pollution control materials or equipment that become part of real property may also be exempt for mining companies that qualify for the production exemption. (See Idaho Code section 63-3622X.)
Examples of pollution control equipment that aren’t exempt:
- A building or other structure that merely houses the equipment
- Construction equipment used to build or install pollution control equipment
Taxable Items – Mining
The production exemption guide lists items that are always taxable. Taxable items that are specific to miners include:
Underground mining taxable purchases
- Equipment used in exploration activities
- Equipment used for venting or conditioning the air of the mine – if it becomes a part of the real property
- Equipment used for drainage of the mine if part of the real property
- Maintenance and equipment used to maintain and clean up mining equipment
- Equipment and supplies used for sampling and assaying, other than for quality control
Aboveground, open pit mining taxable purchases
- Equipment used in exploration and discovery activities
- Equipment, materials, and supplies used in real property improvements
- Equipment and supplies used to maintain and clean up the mine and mine equipment
- Equipment and materials used in land reclamation activities
- Equipment and vehicles used to transport people
- Equipment and supplies used to transport finished products
- Equipment and supplies used to transport ore and overburden between geographically separated sites, processing plants, or displosal sites if:
- A substantial break in the production process occurs, and
- The activity doesn’t further the processing of the ore by sorting, sizing, or grading
- Equipment and supplies used in personnel support activities
Note: If the equipment is primarily used for ore extraction purposes, it isn’t taxable.
Other taxable mining purchases
- Office, maintenance, or janitorial equipment and supplies
- Marketing, promotional, sales, or distribution equipment and supplies
- Equipment and supplies to analyze or model financial results
Motor vehicles
Motor vehicles that are required to be licensed are almost always taxable. This includes vehicles with restricted-use plates and recreational-use stickers.
Change Use of Exempt Item – Mining
If you change the primary use of an item
If you buy an item exempt to use in a mining activity, it becomes taxable if you stop using it in a mining activity. You must then pay tax on the fair market value of the item.
Note: The opposite isn’t true. If you pay tax on an item because you use it in a non-mining activity, you can’t claim a tax credit if you begin to use it in a mining activity.
Buyer’s Responsibility – Mining
Buyer’s responsibility when making exempt purchases
You must keep records of all your purchases and show whether you paid tax on them.
- Records must show what you bought, when you bought it, how much you paid for the goods, and how much tax you paid.
- Your accounting records must include the standard books and records maintained in a business.
- Keep all your records for at least four years. (You may need to keep them for seven years if you don’t file sales tax returns).
Use tax
When you buy, use, or store taxable goods in Idaho, but don’t pay sales tax when you buy them, you owe use tax.
You may owe use tax if:
- You buy goods from an internet retailer that doesn’t collect tax
- You buy a taxable item from a seller that didn’t charge sales tax because the seller has your exemption certificate on file
- You buy an item in a state that doesn’t have sales tax, then bring the item to Idaho
- You change how you use an exempt item. (See If you change the primary use of an item.)
- You take ore from your resale inventory (e.g., gravel) and use it in your business
Learn more about use tax on our Sales/Use Tax page.
Exemption Certificates – Mining
To buy an item exempt from sales tax, give the seller a completed exemption certificate.
ST-101, Idaho Resale or Exemption Certificate
Form ST-101 – Sales Tax Resale or Exemption Certificate
Fill in the form:
- Write the name and address of both the seller and your business at the top.
- In section 2 “Producer Exemptions,” check the box for the producer exemption(s) you qualify for.
- List any products you produce on the line at the bottom of section 2.
- Under “Buyer,” at the bottom of the page, sign the form. Fill in the rest of the fields (name, title, EIN or driver’s license information, and date).
- The seller should keep the form and not charge you tax on exempt items in the future.
Optional short version of ST-101
- Retailers can print or stamp a short version of the ST-101 on sales invoices, or
- Buyers can print the short version on their purchase orders.
- This shorter version must be completed for each sale. The wording must be:
I certify that the property I’ve purchased will be used by me directly and primarily in the process of producing tangible personal property by mining, manufacturing, processing, fabricating, or farming, or as a repair part for equipment used primarily as described above. This tax exemption qualifies if this statement is signed by the buyer and the name, address, and nature of the buyer’s business are shown on the invoice. Any person who signs this certification with the intention of evading payment of tax is guilty of a misdemeanor.
[Indicate spaces for NATURE OF BUSINESS and SIGNATURE OF BUYER]
Retailers should keep a copy of the sales invoice showing the stamped or printed exemption.
Multijurisdictional
You can use the Uniform Sales and Use Tax Certificate – Multijurisdiction when you buy from out-of-state businesses that are registered Idaho retailers instead of Form ST-101 if:
- You’re a multi-state taxpayer, and
- You’ll resell the goods you buy
Instructions:
- Write the name and address of both the seller and your business at the top.
- Check the box for “Retailer” if you sell to end users or “Wholesaler” if you sell to buyers who’ll resell the goods.
- Write your Idaho seller’s permit number in the ID section.
- Sign and fill in the bottom of the form.
- The seller should keep the form and not charge you tax in the future.
Note: Everything you buy using the Multijurisdiction exemption certificate is exempt because you can use it only for goods you’ll resell.
Remember: Even if you buy from a seller that has your exemption certificate, not everything is exempt.
- Some items are always taxable.
- Some items are taxable if they’re not used in qualifying activities.
Sales by or to Miners
Selling the goods you produce by mining or processing ore for sale
Wholesalers
If you only sell goods to a customer who will resell them, you may be a wholesaler. Read more in our Wholesalers guide.
Retailers
If you sell to a final consumer, you might be a retailer. Read more in our Retailers guide.
Examples of sales you must collect tax on if you’re a retailer:
- Selling gravel to a contractor or employee
- Selling ore to collectors who don’t resell them
- Selling equipment or promotional items to customers who don’t resell them
Don’t charge tax if the goods you’re selling are:
- Sold for resale, and the buyer gave you a completed
Form ST-101 – Sales Tax Resale or Exemption Certificate, or
- Never taxed in Idaho
Vendors that sell to miners
- If you sell to miners, don’t charge sales tax on exempt items if the miner gives you a completed exemption certificate (e.g., ST-101).
- If you have a completed certificate on file, don’t collect sales tax on exempt sales to the miner in the future.
Note: Not everything is exempt for miners. You must charge tax on items that aren’t exempt from sales tax. Read more on making sales in our Retailers guide.